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Divided FCC approves Tribune transfer

By a 3-2 vote, the FCC last Friday approved plans by real estate tycoon Sam Zell to take the Tribune Company private. The FCC’s decision comes three weeks before the FCC’s anticipated decision on a scaledback version of the 2003 media ownership order that would lift the newspaper-broadcast cross ownership (NBCO) ban in the top 20 media markets subject to certain conditions. (The Third Circuit Court of Appeals previously remanded the 2003 order, which had ended the NBCO ban in most U.S. markets.) As part of its $8.2 billion request to transfer ownership from existing shareholders to Zell and an employee stock ownership fund, Tribune asked the FCC to waive indefinitely the NBCO rule in five markets. Although the FCC granted a permanent waiver of the rule in Chicago (where Tribune’s ownership of the Chicago Tribune, radio station WGN, and WGN-TV predates the existence of the 30-year-old NBCO rule), the agency rejected Tribune’s request in favor of time-limited waivers in four other markets where Tribune holds newspaper and broadcast properties. Acknowledging that the NBCO rule has been the subject of “extensive litigation” and that Tribune may challenge the denial of an indefinite waiver in court, the FCC said the limited waivers would go into effect if Tribune files an appeal and would remain in effect for two years or for six months after the end of litigation, whichever is longer. Describing the agency’s action as “clever,” FCC Commissioner Michael Copps, in a dissenting statement, asserted that “Tribune gets at least a two-year waiver plus the ability to go to court immediately and see if they can get the entire [NBCO] rule thrown out.” Asserting, however, that the transfer “allows the new owners to breathe new life into Tribune’s newspapers and broadcast properties,” FCC Commissioner Robert McDowell defended the decision as one that “allows Tribune to compete against a growing chorus of new media voices in the information, opinion and entertainment market place that . . . would not have developed under a multi-platform [NBCO] ban.”